Butte semi-weekly miner. [volume] (Butte, Mont.) 1886-1890, 1887-05-07
UNION PACIFIU MATTERS.
How Railroad Kings Manipulate stocks
Among Themselves.

How Railroad Kings Manipulate stocks
Among Themselves.
NEW YoRK, May 5.-The examination cf
Special Counsel Artemus II. Holmes, of the
Union Pacific Railroad Company, was con-
tinued before Commissioners Pattison.
Anderson and Littler to-day. Mr.. Ander
son held in his hand the judgment roll .sal
the matter OF the hearing before Reiatee
Ruggles on application to have the Denver
Pacific stock released as security for
mortgages on the Kansas Pacific, of which
witness related the story yesterday. An
derson asked il witness knew who erased
the answer to the question: What we're
the net earnings of the Kansas Pacific last
year7"
The original answer was: "Not much, if
anything" and over which erasure was
written, "about hat q million dollars"
Mr.. Holmes knew nothing about this,
but the substituted answer is probably the
correct one. Mr.. Holmes thought Judge
Dillon drew up the articles Of the consoli.
dation of the Kansas Pacific and Union
Pacific and that it was prior to January
"a, 1880, or prior to tho time the %, $50
shares of the Denver Pacific stock passed
from the ownership OF the Kansas Pacific
Messrs. Jay Gould. Russell Sage and others.
The Record states that Mr.. Gould held
and voted on 70 914 shares; Mr.Ames
4.O35; Sidney Dillen GLIB; Henry Willard
not any, nor Mr.. Holmes. Russell SAFE had
9,977 shares and these constitute thaU Union
Pacific party. The shares we're $50 each,
and 1885, ,O84 shares were represented in
the agreement. These men were I'll Di-
rectors of the Union Pacific. Mr.. Holmes
did not kno~ how much profit there was
in the pool. but thought not SO much DIS
$4,000. 900.
Commissioner Pattison asked who got
possession OF the SO ZOO, 900 of Kansas
Pacific and 100000 OF Denver Pacific
stock, but Mr.. Holmes said he thought
they simply drifted back to their original
owners "Under the consolidation, Gould
or any other holder OF Kansas Pacific
stock, could exchange two of their $50
shares for one 500 share of Union Pa
cific stock, their values being about the
same at that time. The relative status OF
the securities were fixed by arbitration of all
the leading parties at a trife greater
than their market quotations, a. an in.
ducement to holders to put them into
the pool as good investment" explained
Holmes.
The schedule at which the various secu-
rites were admitted to the pool was as
follows: Held stock, 12Aper cent; floating
debt, so per cent; ubordina'e ed income
bonds, 80 per cent; subordinated income
bonds, 80 per cent; and second laud grant
bonds, so per cent. "Is it not true" asked
Anderson, "that Jay Gould, Sidney Dillon,
Russell Sage, Frederick Ames and others
you have named obtained credit.by means
Of the pool Of large amounts of Kansas
Pacific stocks in subordinated bonds. un-
bonds, second land grant
bonds, Leavenworth Pacific stock, etc?"
(Holmes) Eyes in exchange for other
securities"
Holmes made statement that the Union
Pacific profited by the consideration, in
that 1t got the benefit of all the handling
and thereby stopped the competition of
the Kansas Pacific and Jay Gould thus
dangerous weapon OF a hostile
rival. II the consideration had not been
made, the Kansas Pacific would not have
been worth ten cents on the dollar, and
Denver Pacific stock would not have
been worth more than it's value as
waste paper. To Gen. Pattison, Holmes
said he did not think the effect was to load
the Union Pacific with two valueless roads,
because tho Kansas Pacific had been a
good paying road ever since. 1t was true,
Denver stock was worth $4,000. 900 the
next day by the consummation uf the con-
solidation.
After recess Judge j. F. Dillon, nephew of
Sidney Dillon, who became an attorney Tor
the Union Pacific in 1879. was the witness.
He thought he prepared the articles of the
OF the roads under instruc-
tions. Bey ond this fact nothing OF interest
was elected.